In his quarterly 13F filing with the SEC, released after 4 p.m. on November 15, Warren Buffett made several significant changes to the Berkshire Hathaway portfolio. In the quarter ending September 30, Buffett added 16.4 million shares (approximately $400 million) of Wells Fargo, for a total of 336.4 million shares, with a current market value of $9.3 billion. His purchase in the third quarter represented a 5% increase in his Wells Fargo holdings. This is an additional vote of confidence in Wells Fargo and the ongoing economic recovery, especially since Buffett did not add to his Wells Fargo investment in the second quarter. Wells Fargo is Berkshire Hathaway’s second largest stock holding, after Coca-Cola.

With Lou Simpson retiring at the end of December, Berkshire substantially reduced or sold many of his GEICO investments, including virtually all of his $200 million stake in Comcast. Other sales of Lou Simpson stocks included Carmax, Home Depot, Iron Mountain, NRG, and Republic Services. (See my earlier blog of August 30 where I list Lou Simpson’s holdings as of June 30, 2010.)

I am also quoted in this Bloomberg article (November 16, 2010) on this subject:

Berkshire Sells Nike, CarMax as Buffett Changes Stock Pickers

By Andrew Frye and Natalie Doss

Nov. 16 (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. sold stakes in Home Depot Inc. and CarMax Inc. and cut its holding of Nike Inc. as the billionaire replaced a retiring investment manager and built the company’s cash holdings.

Buffett has trimmed Berkshire’s portfoliosince the 2008 financial crisis and instead focused on buying whole companies. The 80-year-old chairman, renowned for multibillion dollar stock bets, is reshuffling his holdings as he welcomes hedge-fund manager Todd Combs, hired by Berkshire in October. Lou Simpson, 73, once identified by Buffett as his emergency stand in, is scheduled to depart at yearend from Berkshire’s Geico unit.

BNY Mellon

Buffett’s firm had 1.99 million shares of BNY Mellon at the end of the third quarter. The stake in Wells Fargo rose to 336.4 million shares from 320.1 million at the end of June. Berkshire has increased its Wells Fargo stake in four quarters since the beginning of 2009 as reductions in short-term interest rates and financial industry rescue programs helped revive banks’ profits. BNY Mellon advanced 37 cents to $28.10 in late trading yesterday.

“That is very much a vote of confidence not only in Wells Fargo, but in the commercial banks and the banking sector,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. “Warren Buffett is perhaps more confident now in the economic outlook and that our recovery, however slow, will continue.”

Net income fell to $2.99 billion, or $1,814 a share, from $3.24 billion, or $2,087, a year earlier, Omaha, Nebraska-based Berkshire said today in a statement. Operating earnings, which exclude some investment results, were $1,692 a share, missing the $1,736 average estimate of five analysts surveyed by Bloomberg.

Earnings from Berkshire’s energy and utilities unit, including MidAmerican and PacifiCorp, decreased 4.3 percent to $331 million as energy costs climbed.

Marmon’s earnings increased 9.3 percent to $212 million. The business, purchased from the Pritzker family in 2008, has operations including railroad tank cars and making wire and cable products.

The global economy is “inching forward” and Berkshire is hiring at some of its subsidiaries, Buffett said in remarks broadcast in Israel last month. Berkshire, which employs more than 200,000 people, cut about 20,000 jobs last year.

“Warren Buffett positions his company long-term,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business. “He doesn’t move in and out of sectors depending on the economic cycle.”

Union Pacific

Railroads have reported earnings increases this year as the expanding economy boosts demand for freight hauling. Union Pacific Corp., the largest U.S. railroad by 2009 revenue, posted a 51 percent profit gain in the third quarter as auto shipments advanced. CSX Corp.’s Michael Ward, CEO of the country’s No. 2 publicly traded railroad, said “nearly all markets” produced volume growth in the third quarter.

Buffett, who sold stock and debt to help finance the Burlington Northern deal, is making smaller acquisitions as Berkshire’s earnings help rebuild capital. In October, McLane bought a Tennessee liquor distributor. Berkshire’s real estate brokerage said this week it had acquired a North Carolina-based home intermediary.